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Polyester Fiber Prices in China, India and Pakistan

Polyester fiber prices have sharply fallen in the past seven days and may be expected further tumbling in the short term, due to a series of factors analyzed in our weekly report. With apparel exports plunging and clothing retail sales declining, demand for textiles and fibers is rapidly weakening, as a result. 

Polyester fiber prices have continued sharply falling in the last seven days in China, over a weakness in demand from the textile industry.

Benchmark 1.4D PSF price has dropped 540 yuan per metric ton in a single week, or 6.4%.

Prices have fallen more than 10% in four weeks.

Filament prices have also continued plummeting in the past seven days, although less significantly.

POY prices have declined 420 yuan or 5.2% whereas DTY and FDY were both down 250 yuan or about 2.6%.

POY prices have plunged by 14.2% in only four weeks with DTY and FDY however less dramatically falling.

After experiencing a sudden surge in last summer due to a similar rebound of PTA prices, polyester staple fiber and filament prices have returned back to their initial level in November before remaining rather unchanged for months.

The sudden fall of polyester prices has been triggered by the US decision to eventually raise tariffs on a series of Chinese products.

US imports of polyester fibers have been targeted with additional tariffs being raised from 10% to 25%.

The US market is a major destination of specific polyester fibers from China, used for stuffing pillows for instance, and known as “polyester fiberfill”.

The sharp increase of US tariffs is however not the main reason behind the current crisis.

Apparel exports from China have sharply fallen to both the US and EU markets in the first quarter, reflecting the major shift to low-income countries after production costs have too rapidly risen in the Chinese clothing industry.

In addition, clothing retail sales are heavily depressed on China’s domestic market, resulting in lower demand for textile products.

The peak season has been very disappointed after lunar year holidays with inventories piling up at textile plants.

Fabric and yarn stocks have risen and demand for fibers has sharply fallen, as a consequence.

Polyester fiber prices had been supported for months by the high level of raw material costs at fiber plants, whatever the long term fall of glycol prices.

With PTA prices tumbling in the past two weeks, PSF and PFY producers have been forced to sharply lower their price offers.

Margins have also fallen at fiber plants where operating rates are being lowered from their record levels.

Prices could however continued falling, until inventories are eventually digested by downward textile producers.

In the meantime, they could reach much lower levels.

Source: Emergingtextiles